OUR THOUGHTS ON:

InvestOhio Credits Available for Investors in Small Business

State and Local Tax

By Mark Rossetti

Beginning November 14, 2011, in an effort to generate an infusion of cash for Ohio small businesses to create additional jobs, the Ohio Director of Development is awarding up to $100 million in tax credits during the current State of Ohio fiscal biennium, ending on June 30, 2013. InvestOhio provides a nonrefundable personal income tax credit to investors infusing new equity (cash) into Ohio small businesses to acquire an ownership interest in the company. For purposes of the credit, a small business is defined as less than $50 million in assets or less than $10 million in annual sales. Individuals who invest up to $10 million in eligible small businesses may receive a 10% income tax credit if the investment is held for two years. The small business is required to reinvest that infusion of cash into one of five categories of allowable expenses within six months of its receipt. The investor must retain his or her ownership interest for a two-year holding period before the tax credit may be claimed. The small business must similarly retain the property that it purchased from the cash infusion for the entire two-year holding period.

The credit is available to individuals, estates, trusts subject to the income tax, and pass-through entities in which a direct or indirect interest is held by an individual, estate or trust. C-corporations do not qualify for the credit.

Taxpayers wanting to take advantage of the credit will need to act quickly, since the credits are only available on a first-come, first-served basis.

If you have questions about whether or not you qualify for the credit, please contact Mark Rossetti in the SALT group at (614)586-7234.

© 2011 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person any tax-related matter.

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© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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